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How Coca-Cola is using smartphone data to personalise in-store ads

When it comes to online shopping, temptation lurks on every web page. This is because – while you might have decided against buying that new pair of shoes you were eyeing up – you’re bound to see a targeted ad for them sooner or later.

As consumers, we’re used to being targeted in this way. But what if you were to see an ad based on your mobile browsing history in an actual supermarket?

It’s not such a far-fetched notion. Recently, Coca-Cola started using Google technologies to target consumers in US grocery stores. So, how does it work exactly? Here’s a bit more on the story.

Ads in grocery aisles

Digital out-of-home advertising typically uses contextual data to display relevant ads, e.g. a Coke billboard that changes depending on the weather. Digital signs (such as those at bus stops or in buildings) also use data in this way.

The problem for brands like Coca-Cola, however, is the high cost of these ads, combined with a lack of any real personalisation or targeting to individual consumers. This is where Google-integrated ‘endcaps’ come in – a term used to describe advertisements at the front of grocery store aisles. (Endcaps are fairly common in the US, but less so in the UK.)

These endcaps serve ads to passing consumers based on their smartphone data, using a combination of Google’s DoubleClick and location-based technologies.

The data includes anything from your basic gender or age demographic to previous browsing history. So, an ad could change from Coke Zero to Glacéau Smartwater if it recognises a preference for healthier products, for instance.

The aim is to connect and engage with consumers to drive sales of the brand in retail stores – however Coca-Cola has also suggested that it benefits other brands and products within the same category (in this case soft drinks). This sounds somewhat improbable, but moving on.

Creepy or enhanced customer experience?

The real question is: Will consumers will be happy to receive super targeted ads, or does this level of personalisation veer into creepy territory? This generally remains one of the biggest issues for marketers, with research from Pew suggesting that consumers do not want to trade privacy for personalisation.

It found that people are particularly negative about targeted ads if they are unaware of what is happening or do not provide outright consent. However, the study also found that consumers are more willing to accept data tracking if ads are highly relevant or beneficial, e.g. offering discounts or coupons.

Fortunately, Coca-Cola’s endcaps also involve communicating wirelessly with devices to send tailored offers or coupons, also meaning people do not have to log-in or stand still. This could be one benefit, but it is unlikely to satisfy all consumers.

Will it catch on?

While this example from Coke appears to be a first, it’s clear that tracking physical consumers is becoming a pressing concern for the retail industry as a whole.

Online retailers can easily hone strategies based on metrics like click-throughs and basket abandonment rates – so it’s understandable that offline retailers want to build a similar picture of consumer behaviour.

Interestingly, a report by CSC recently suggested that as many as 30% of retailers are now using facial-recognition technology to track customers in-store. By comparing certain facial characteristics with browsing or buying behaviour, retailers are able to predict intent and deliver relevant ads. Unsurprisingly, CSC also reports that 33% of consumers think the technology is intrusive, while 56% do not even know what it is.

Whether consumers are creeped out or keen for this kind of in-store tech – with Coca-Cola set to roll out endcaps to thousands of US stores – we could be seeing much more of it in future.

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Comments (2)

Pete Austin, CINO at Fresh Relevance

The most interesting feature from the report is that 65% of the stores surveyed tracked customers for security purposes and 27% used facial recognition - which, I'm going to make an educated guess, will be almost entirely for security too.

It follows that, if you are shopping in a store with security cameras, there's a 40% chance that they are equipped to do facial recognition. Bet you didn't know that.

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